Official policies create low wages

By Huang
Yi-chuan 黃義銓 /

Tue, Oct 01, 2013 - Page 8

On Monday last week, the Directorate General of Budget, Accounting and Statistics released wages and employment data for August showing that salaries had fallen in real terms. This familiar story could be considered the most typical political “achievement” of President Ma Ying-jeou’s (馬英九) administration.

The nation’s unemployment rate of 4.33 percent in August remained the highest among the four “Asian Tigers.” The jobless rate for young people aged between 15 and 24 rose to 14.06 percent, meaning that one in seven in that age group is looking for work. It is also the second-highest youth unemployment rate in the nation’s history, surpassed only by the peak of 15.77 percent following the 2008 to 2009 US financial crisis. With wages falling and unemployment climbing, the lives of Taiwanese workers have become thoroughly miserable.

Let us compare the performance of Taiwan’s two major parties during their times in power. Between August 2000 and August 2007, when the Democratic Progressive Party (DPP) was in power, the average unemployment rate for young people aged 15 to 24 was 11.82 percent — 2.62 times the overall unemployment rate.

From August 2008 to August this year, under the Chinese Nationalist Party (KMT) administration, the average unemployment rate for young people was 13.95 percent, which is 2.92 times the overall jobless rate.

As for workers aged between 25 and 44 years old, the average jobless rate under the KMT government was 4.77 percent, compared with 4.06 percent during the DPP’s years in office.

Where have job opportunities for both young and older people gone under the Ma government? One factor to consider is the number of blue-collar foreign migrant workers, which rose 9.62 percent when the DPP was in government and a further 28.53 percent since Ma took office.

Ma’s government has introduced a number of policies to ease restrictions on the employment of foreign workers, such as allowing employers who pay an additional employment stabilization fee to employ more foreign workers.

The policies of the government also exempted employers who initiate new investment projects from paying this fee at all. The cumulative effect of these policies threatens job opportunities for Taiwanese workers.

The consistently high unemployment rate is a glimpse into the effects of the Ma government’s measures that allow foreign workers to take the place of Taiwanese workers.

During his first presidential election campaign, Ma said that he would guide Taiwan to regain the “eight lost years” — the DPP’s eight years in power. Ever since he took office, Ma has been making up for what he sees as lost time by promoting economic integration between the two sides of the Taiwan Strait, but the result has been that Taiwan is getting locked into China’s economy.

At the same time, his government has raised the ratio of foreign workers that companies are allowed to employ, with the aim of cutting labor costs and attracting Taiwanese business with investments in China and other countries to come back to Taiwan.

The combined effects of these policies over the past five years have been to clearly slow down upgrades to the nation’s, while jobs are being taken over by foreign workers, including many Chinese. This has made it hard for the government to maintain annual economic growth rates of 3 percent, or even 2 percent, while workers suffer the twin miseries of low wages and high unemployment.

There is good reason why Ma’s approval rate has fallen to a low of 9.2 percent. If the Ma administration is unwilling to reflect on its own performance, if it keeps on trying to push through the cross-strait service trade agreement and lock Taiwan even more tightly into China’s economic sphere, and if Taiwanese go on doing little or nothing to salvage their own situation, then there will not be much hope of evading a miserable fate for the nation.

Huang Yi-chuan is an adjunct assistant professor living in Greater Taichung.